Operational ExcellenceMoving up the MSP Value Stack

Certified MSP Coach

Tony Williams

Introduction

Tony Williams was CTO and COO for RIATA Technologies

2010 acquired by White Glove Technologies

Served as Director of Operations for White Glove until 2012 when we were acquired by MindShift

Grew RIATA to $7M, 38 employees

White Glove grew to 125 employees, 5 locations, $22M

467 MRR Clients, 14,000 service tickets per month, average response time of 17-27 minutes.

2014 voted one of the Worlds Top Executives,

Entrepreneurs and Executives by MSPMentor

Welcome to MSP Town!

We are

proactive!

Our tools

are the

best!

We’re

trusted

advisors

We have

great

people

What's Happening in Todays

MSP ModelCrowded

More mature

More technology that is more

affordable

Price becomes a selling point

“We Do That” world

The Result of Market Conditions

Many MSP’s struggle with MRR sales

AISP too low

Average profit margins are flat

Low leverage

MSP Business Model Evolution is

Happening Now

Always evolving, about every ten years we have to repackage ourselves

Because of market maturation, commoditization and low or average profits are more prevalent

Evolution is driven by client needs, technical environment change and because our tools are advancing

We need to remain relevant and be able to make a profit

Next Evolution:

Technology Success Practice

• Roles and process aimed at the business

Results of technology and technology

decisions

• The focus is your customers business results

leveraging technology and your ability to

demonstrate it

We Need to Deliver Business

Outcomes

Technology needs to support the client’s business

goals

They want us to help them make better business

decisions concerning technology

Leverage technology as a competitive advantage

Impact the big costs in their business

Reduce growing risks surrounding technology

Their needs are delivered from the top of THE MSP

Value Stack

What is the MSP Value Stack?

Many different variations of the definition depending on

who you ask

All of them agree that moving up the value stack means

some sort of separation or differentiator other than low

price

Commanding a higher per seat or per user price based

on predictable results and becoming a Business Partner

and not a Vendor is key for Technology Success Providers

It requires the MSP to become World Class at managing

your number one resource. INVENTORY of TIME

Changing Your Identity and Value

SMB

Ops

Sales

HRFinance

IT

TSP SG&A Expense

• Office

Cleaning

• Office

Supplies

• Computer

Support

• Electric

• Phone

• Internet

• etc…

MSP

Client Perception and Value

How do your clients value your services and relationship?

Are you associated with other professional and strategic services?

Attorney

Accountant

Business Advisor

-or-

Cleaning Service

Landscapers

Water Delivery Guy

A necessary evil

The Value Stack

Strategic

Roadmap

Impact

Alignment

MSP

Technology Success

What's in the Top of the Stack

Business Knowledge

Ability to solve business problems with technology

Business intelligence

Vertical market expertise

Long-term technology planning

Higher skilled staff in all areas

Dashboard Management Strategy

Tactical and Strategic KPIs

Business Planning

Technology Consulting

Top of The Stack Service

virtual Chief Information Officer

Technical to business relationship

Business Strategy

Business goals, challenges, risks, vision, core values,

competition, competitive advantage, market position,

margins…

Technical Alignment and Business Impact are the foundation

Most MSPs Are This Guy!

virtual Captain Obvious

• They meet with non-DM’s

• Their meetings center on ticket reports,

SLA’s, patch status reports, alarms,

hardware life cycle and license renewals

Are You a Virtual Captain Obvious

Do you have a deep understanding of your customers

business?

Are your recommendations based on results focused

technical alignment?

Do you give recommendations that any other MSP would

give?

Do you meet with a decision maker?

Do your customers invest at least 30% of MRR in non-

recurring services?

Characteristics of a World Class

Technology Success Provider

15%-30% Net Profits

Ability to add new Good MRR consistently and have a business development strategy

Process Driven

High revenue to head count ratio

Dedicated roles/minimal bleed-over

1-2 agreement types

Data driven decisions

Low Reactive Services Time

Evolution of The MSP

Inventory of Time

0 50 100 150

Systems Integrator

MSP 1.0

MSP 2.0

TSP MSP 3.0 WorldClass

Reactive Services

Best Practices

Value added Services

TSP Company Roles

Technology Success Provider Roles

CentralizedServices/Automation

ProactiveMaintenance/BestPractices

TechnologyAdvisor/StrategicRelationship

Reactive Services

Professional Services

Low Value Services are TSP Table

Stakes

Low

Perceived

Value

SupportCentralized

ServicesProfessional

ServicesTechnology Alignment

vCIO

Technology

Success

Technology Success Provider

Differentiators

Fixing Technology

Managing Technology

Delivering Outcomes

Technology Success Practice

Standards Alignment Impact Strategy

MSP Practice

Break & Fix Business

Blob in the Box

Standards

Your client’salignment against

your standards

Detailed Role Responsibilities in a

Technology Success Provider

Proactive Maintenance/Alignment – One to few management and relationship duties, best practice and alignment responsibilities to a limited client set. Gathering and reporting critical system configurations and performance data and vulnerabilities. 15-20 clients $50K-$70K MRR managed

VCIO/Technology Consultant – One to few relationship management, business awareness, possible vertical market expertise, technology road map, budget planning, utilize proactive maintenance data to align technology to clients business goals. Generate an average of 20%-30% or more of total MRR per month in NRR. Manage $90K-$125K MRR

Centralized Services – One to many management and alignment duties. Automation of man-hour intensive issues. General security, patching, AV and cloud management. Manage up to 5000 endpoints

Detailed Role Responsibilities

Reactive Services – One to many (250-450 endpoints per

FTE, $50K-$70K MRR per FTE) Address any client

initiated service request in accordance to TSP’s brand

promise and SLA. Main goal is to close as many tickets

as possible as quickly as possible. Can include dedicated

Escalation Engineers. Process and Company Way driven,

Capable of closing 80%-90% of service requests on first

call

Professional Services – Perform project work, new

product installations, maintain high productivity, bill

between $17K-$25K per FTE monthly

Summarize Role

Requirements Follow the 5 Service Delivery Areas

Reactive Services, Proactive Services, Centralized Services, Technical Consulting, Professional Services

Each role must have a dedicated purpose

Every employee fits into a role

Each role should be clearly outlined

Every role should have individual and team goals

Each role should be accountable on a daily, weekly, monthly, quarterly and annual basis

Make sure you have the right person in the role

Clients Make a Difference

You should seek out IT Strategic clients that rely on their technology to drive their business and understand its importance

There should be an entry level AISP and minimum MRR

Clients must understand that they are buying into your proven processes and best practices, That is the differentiator

You have to be able to demonstrate predictable results for a predictable fee and what that means – consistently!

They must value you as a STRATEGIC PARTNER not a Vendor

Client Strategy

After we review the business impact of misalignments,

the client has two choices:

Follow our recommendations

Change their expectations & live with the results

Difference between technical & business conversation

(Captain Obvious)

It’s our job to show our client the impact of our

technology decisions as a business success factor

Top of the Stack Management

KPIs

There are hundreds of KPIs that can be monitored and managed too but not all of them are necessary to build and run a world Class TSP. A dashboard of critical STRATEGIC KPIs should be created and reviewed weekly

Each role should have a defined set of TACTICAL performance KPIs that they are managed too

TACTICAL KPIs are the performance indicators to achieving the STRATEGIC KPIs which are components of a Business Plan

The three most important Strategic KPIs for an MSP are AISP, Average MRR and Reactive Time Per Endpoint

How do you get to the Top of the

Stack

1. Dedicated roles (Especially technology consulting and alignment)

2. Define your service offerings and limit to 1-2

3. Thoroughly train your team on your agreements and their role in delivering services consistently

4. Know your service delivery costs and price your product to achieve a 70% Labor Loaded Gross Margin on Reactive Services

5. Build the confidence to price your services properly and explain the value as opposed to trying to be the lowest priced

6. Build your client portfolio with IT Strategic clients that value and understand your process and its impact on their business

How do you get to the Top of the

Stack

7. Become self-sufficient in managing and utilizing your

tools (RMM, PSA…)

8. Identify and track strategic KPIs

9. Practice collaboration and communications techniques

such as daily huddles, weekly leadership meetings,

weekly operations meeting

10. Staff with the right people in the right seats

11. Be process driven in every aspect of the business

Top 5 Barriers to the Top of the

Stack

Not knowing and understanding your cost for service delivery and your required LLGM (Command)

No defined roles with performance metrics that are focused on increasing LEVERAGE

Lack of confidence to price your services right/pursuing the wrong clients/Ineffective business development strategy

No process in the company or a strategy to manage your Company Way

Too much REACTIVE SERVICES time

What is the difference between

$60/Seat and $125/Seat Service

Proactive

Maintenance

Technical

Advisor

Reactive

Services

Professional

Services

Central

Services

RT

RT

RT

RT

MSP Circle of Life

Command

Identification

ProcessStandardization

Discipline

Questions

Tony Williams

Tony@TruMethods.com

Cell# 512.423.4759

Free vCIO Training Manual

• “TruMethods vCIO Training

Manual”

• 22-page training manual

• vCIO role definition

• Relationship with other service

delivery areas

• Standards and Alignment

overview

• vCIO process training

www.trumethods.com/vCIO

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